Ontario auto insurance rates decrease in third quarter of 2005

Ontario private passenger auto insurance approved rates decreased during the third quarter of 2005 (July 1, 2005 to September 30, 2005), reports the Financial Services Commission of Ontario.

In the third quarter of 2005, for the 61.82% of the market that had rate changes approved, the average rate change was -1.62%, when weighted by market share.

The average rate changes approved for the first and second quarters of 2005 were -1.12% (representing 7.50% of the market) and -1.62% (representing 45.79% of the market), respectively.

In 2004, rate changes approved for the entire market averaged -10.60%. From the beginning of 2005 up to the end of the third quarter, approved rates declined by 1.82% for the entire market. The combined decline in approved rates for 2004 and the first three quarters of 2005 is 12.42%. The rate changes approved in the third quarter of 2005 become effective in the third quarter of 2005 or later, for renewal business.

The approved rate change shown for each insurance company is the average for that particular company. The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

The rate changes posted reflect cost-saving measures arising from recent reforms to the automobile insurance system, which are being passed on to consumers in the form of lower rates.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.